Elemelu to FG: Pay N1.3trn Debt to GenCos to Avoid Sector’s Collapse

27th May 2024

The Chairman of Transnational Corporation (Transcorp Plc), Tony Elumelu, has urged the Federal Government to as a matter of urgency pay off the N1.3 trillion owed to the power generation companies in Nigeria to avert the collapse of the sector.

Elumelu who stated this at the annual general meeting of Transcorp in Abuja yesterday said the GenCos could no longer afford to continue to subsidise the power sector.

He explained that Transcorp Power alone was owed about N250 billion for power supplied to the national grid.

Elumelu also urged the government to fully privatise the power sector by divesting its 40 percent stake in the eleven electricity distribution companies and the 100 percent stake in the Transmission Company of Nigeria (TCN).

“We have liquidity challenges in the sector. As we speak, Transcorp Power is owed around N250 billion. We need this liquidity as a sector and as a company to help us stabilize and improve access to electricity. As it stands today, we can say that the power generation companies are subsidizing the country on electricity. We need this debt settled so that we can make progress”, he stated.

Elumelu added: “Finally, I want to seize this opportunity to call for the completion of the power sector privatization. Only a partial privatization of the power sector has been achieved since it started in 2013. As of today, the Transmission Company of Nigeria which is so critical is owned 100 percent by the Federal Government and DisCos are also owned 40 percent by the government.

“I believe that to enable the sector to run efficiently by the private sector, I recommend that the Federal Government should come out with a clear timeline for the full privatization of the power sector starting with the Transmission Company of Nigeria and then the DisCos”.

On the performance of Transcorp Plc, Elumelu told shareholders that the company grew its market capitalization by 604 percent from N50 billion at the beginning of 2023 to N577 billion as at the end of March 2024.

Also the group’s combined capitalization on the Nigerian Exchange, according to him, grew from N114 billion to over N4.4 trillion as at the end of the first quarter of 2024.

Elumelu disclosed that Transcorp gross earnings for the year 2023 grew by 47 percent from N134 billion in 2022 to N197 billion while profit before tax rose by 94 percent from N30 billion in 2022 to N59 billion in 2023.

Total assets, he stated, increased by 20 percent to N530 billion while shareholders’ funds grew by 21 percent from N155 billion to N187 billion driven by retained profit for the period.

Transcorp Plc has four subsidiaries including Transcorp Power, Transcorp Hotel, TransAfam Power and Transcorp Energy.

In her address, President/GCEO, Transcorp Plc, Dr Owen Omogiafo said the group achieved a return on capital employed of 30 percent driven by a 47 growth in revenue alongside a 50 percent increase in the operating cash flow from N37.2 billion in 2022 to N56 billion in 2023.